Reducing waste, cutting supplier numbers and streamlining its range of products are just some of the near-100 initiatives travel hub food business SSP (SSPG) is implementing to improve margins. The strategy seems to be working: adjusted operating margins rose by 50 basis points to 3.4 per cent in the first half. Strong like-for-like sales growth also underpinned improvements in group turnover despite the challenge created by various terrorist incidents around the globe.
Chief financial officer Jonathan Davies said the rail sector in the UK and Europe saw weaker trading in the period, something that was "particularly marked" in the immediate aftermath of the Paris attack, when the rail business in France dropped 10 per cent. Sales there are still in negative growth but starting to display a "reasonable rate of recovery".
Performance at its airports was much stronger, but there was an inevitable knock to the 'rest of world' division as a result of its exposure to Egypt. Mr Davies said sales in the country were down more than 50 per cent and this, alongside start-up costs in new locations, contributed to the 62 per cent drop in adjusted operating profits across this region.
Analysts at Panmure Gordon expect adjusted pre-tax profits of £91.2m in the year to September 2016, leading to EPS of 13p, up from £82m and 12.2p in FY2015.
| SSP (SSPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 310p | MARKET VALUE: | £1.47bn | |
| TOUCH: | 309.9-310p | 12-MONTH HIGH: | 325p | LOW: 260p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 59p* | NET DEBT: | 125% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 859 | 13.8 | 1.6 | 2.10 |
| 2016 | 897 | 22.2 | 2.9 | 2.50 |
| % change | +4 | +61 | +81 | +19 |
Ex-div: 2 Jun Payment: 1 Jul *Includes intangible assets of £657m, or 138p a share | ||||
